PSE&G Files Rates For Energy Strong Program

PSE&G Files Rates For Energy Strong Program
Customer bills expected to remain steady while making necessary improvements
to reduce outages
PR Newswire
NEWARK, N.J., March 20, 2013
NEWARK, N.J., March 20, 2013 /PRNewswire/ --Public Service Electric and Gas
Company (PSE&G) today said the typical residential customer who receives both
electric and gas from the utility is projected to pay about $12 less per year
in 2018 than today if the utility gets approval for every project in its
"Energy Strong" program to upgrade its electric and gas distribution systems.
The bill impact assumes that natural gas costs remain low and PSE&G supply
costs are at current levels.
(Logo: http://photos.prnewswire.com/prnh/20120830/MM62627LOGO)
On Feb. 20, PSE&G proposed investing $3.9 billion during the next 10 years to
proactively protect and strengthen its electric and gas systems in the face of
increasingly severe weather. Energy Strong would create about 5,800 jobs for
electricians, mechanics, laborers, operating engineers and others, and
countless opportunities for New Jersey businesses. The utility has asked for
initial funding approval of $2.6 billion during the first five years. Because
some of the improvements will take more time to implement, the utility may
seek approval to spend an additional $1.3 billion in the latter five years to
complete the program.
"An energy infrastructure that is better able to withstand storms like Sandy
and other natural disasters can help save NJ businesses hundreds of millions
of dollars in lost revenue and protect our families from the impact of
extended power outages," said Ralph Izzo, PSEG chairman and CEO. "The good
news is that our customers will get the benefit of a more resilient electric
and gas system while we create thousands of jobs for the state's economy."
In a filing today with the New Jersey Board of Public Utilities, the utility
detailed the proposed impacts on customers if the first part of the $3.9
billion investment is approved.
Residential and business bills to remain stable
A typical PSE&G residential combined electric and gas customer is projected to
see their annual bill drop about $12, or $1 per month in 2018. Bills will
fluctuate slightly between now and then. In 2014, the average customer's bill
will be about 70 cents a month higher than 2013 and about $1.50 a month higher
in 2015. Bills will then begin to drop. In 2016 the average bill will be about
$4.70 a month lower than 2013 and $2.90 a month lower in 2017 compared to
2013. The above bill impacts assume current PSE&G supply costs.
The utility estimates that in 2018, a typical annual residential electric bill
will be approximately 3 percent lower than it was in 2008 and a typical gas
bill will be approximately 33 percent lower -- even with the proposed
additional spending – and still well below the rate of inflation.
Business customers also are projected to see lower overall bills in 2018
compared to current bills. For example, an industrial electric customer using
85 million kilowatt-hours per year, with a usage pattern similar to a class
average primary voltage customer*, is projected to pay approximately $1
million less in 2018 than today even if every project in Energy Strong was
approved by the BPU. This bill also assumes current PSE&G supply costs.
The stability of bills is due to a number of factors. First, the price of
natural gas has dropped nearly 40 percent in the past four years, lowering the
cost of heat and electricity. Second, some charges currently included in
customer bills will expire in 2014, 2016 and 2017. Two of those charges are
related to the deregulation of the New Jersey energy market. The Transitional
Energy Facility Assessment will expire in January 2014 and the Securitization
Transition Charge expires in 2016. A third charge, the Non-Utility Generation
Charge, will approach zero in January 2017.
PSE&G is seeking BPU approval to begin the Energy Strong program on July 1,
with initial rates effective Jan. 1, 2014.
"How many more destructive storms can New Jersey endure before we take action
to create a more resilient utility system?" Izzo said. "We cannot afford to
delay. We look forward to productive discussions with our regulators to
prioritize what needs to be done and when."
PSE&G's "Energy Strong" program would make improvements to its distribution
system to reduce the number and duration of power outages caused by severe
storms. The improvements include:
oprotecting more than 40 utility installations from storm surges,
ostrengthening distribution lines,
omaking the electric grid smarter and thereby easier to restore customers,
and
omodernizing the gas distribution system.
Energy Strong has support from a diverse group of business, labor and
municipal leaders.
For more information about Energy Strong, visit www.pseg.com/energystrong.
*A primary voltage customer maintains their own transformer and uses 4,000 or
13,000 volts.
Forward Looking Statement
Certain of the matters discussed in this report constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements are subject to risks and
uncertainties, which could cause actual results to differ materially from
those anticipated. Such statements are based on management's beliefs as well
as assumptions made by and information currently available to management. When
used herein, the words "anticipate," "intend," "estimate," "believe,"
"expect," "plan," "should," "hypothetical," "potential," "forecast,"
"project," variations of such words and similar expressions are intended to
identify forward-looking statements. Factors that may cause actual results to
differ are often presented with the forward-looking statements themselves.
Other factors that could cause actual results to differ materially from those
contemplated in any forward-looking statements made by us herein are discussed
in Item 1A. Risk Factors, Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations (MD&A), Item 8. Financial
Statements and Supplementary Data —Note 13. Commitments and Contingent
Liabilities, and other factors discussed in filings we make with the United
States Securities and Exchange Commission (SEC).
These factors include, but are not limited to:
oadverse changes in the demand for or the price of the capacity and energy
that we sell into wholesale electricity markets,
oadverse changes in energy industry law, policies and regulation, including
market structures and a potential shift away from competitive markets
toward subsidized market mechanisms, transmission planning and cost
allocation rules, including rules regarding how transmission is planned
and who is permitted to build transmission in the future, and reliability
standards,
oany inability of our transmission and distribution businesses to obtain
adequate and timely rate relief and regulatory approvals from federal and
state regulators,
ochanges in federal and state environmental regulations that could increase
our costs or limit our operations,
ochanges in nuclear regulation and/or general developments in the nuclear
power industry, including various impacts from any accidents or incidents
experienced at our facilities or by others in the industry, that could
limit operations of our nuclear generating units,
oactions or activities at one of our nuclear units located on a multi-unit
site that might adversely affect our ability to continue to operate that
unit or other units located at the same site,
oany inability to balance our energy obligations, available supply and
risks,
oany deterioration in our credit quality or the credit quality of our
counterparties, including in our leveraged leases,
oavailability of capital and credit at commercially reasonable terms and
conditions and our ability to meet cash needs,
ochanges in the cost of, or interruption in the supply of, fuel and other
commodities necessary to the operation of our generating units,
odelays in receipt of necessary permits and approvals for our construction
and development activities,
odelays or unforeseen cost escalations in our construction and development
activities,
oany inability to achieve, or continue to sustain, our expected levels of
operating performance,
oany equipment failures, accidents, severe weather events or other
incidents that impact our ability to provide safe and reliable service to
our customers,
oincrease in competition in energy supply markets as well as competition
for certain rate-based transmission projects,
oany inability to realize anticipated tax benefits or retain tax credits,
ochallenges associated with recruitment and/or retention of a qualified
workforce,
oadverse performance of our decommissioning and defined benefit plan trust
fund investments and changes in funding requirements, and
ochanges in technology and customer usage patterns.
All of the forward-looking statements made in this report are qualified by
these cautionary statements and we cannot assure you that the results or
developments anticipated by management will be realized or, even if realized,
will have the expected consequences to, or effects on, us or our business
prospects, financial condition or results of operations. Readers are cautioned
not to place undue reliance on these forward-looking statements in making any
investment decision. Forward-looking statements made in this report apply only
as of the date of this report. While we may elect to update forward-looking
statements from time to time, we specifically disclaim any obligation to do
so, even if internal estimates change, unless otherwise required by applicable
securities laws. The forward-looking statements contained in this report are
intended to qualify for the safe harbor provisions of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended.
Public Service Electric and Gas Company (PSE&G) is New Jersey's oldest and
largest regulated gas and electric delivery utility, serving nearly
three-quarters of the state's population. PSE&G is the winner of the
ReliabilityOne Award for superior electric system reliability. PSE&G is a
subsidiary of Public Service Enterprise Group Incorporated (PSEG) (NYSE: PEG),
a diversified energy company (www.pseg.com).
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SOURCE Public Service Electric and Gas Company (PSE&G)
Website: http://www.pseg.com/energystrong
Contact: Media: Karen Johnson, +1-973-430-7734, Customers & others:
1-800-436-7734